In a state with over 284,000 miles of public roads winding from the soulful streets of Memphis to the misty peaks of the Great Smoky Mountains, driving is a core part of life for Tennessee residents.
Whether you’re commuting down I-40, cruising along the scenic Natchez Trace Parkway, or just heading out for some Nashville hot chicken, you know that the cost of that freedom includes a steady car insurance payment. But for drivers in the Volunteer State, some financial relief may be on the horizon.
What’s Happening?
In a surprising move that counters the recent trend of rising premiums across the nation, State Farm was recently approved to lower auto insurance rates by 6.9% in Tennessee.
As the #1 auto insurance carrier in the Volunteer State, State Farm’s adjustment will be wide-reaching, impacting an estimated 1,269,655 policyholders. The decrease is set to go into effect July 16, so it’s important to figure out your next move before that.
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Understanding the Dynamics Behind Auto Insurance Rate Changes
It can often feel like car insurance rates only move in one direction– up. Insurers typically justify these increases by pointing to a variety of factors that increase their costs. These can include:
Inflation: The rising cost of vehicle repairs, from parts to labor, directly impacts the amount insurers have to pay out for claims. Advanced driver-assistance systems (ADAS) in modern cars, while making driving safer, are often expensive to repair or replace.
Medical Costs: The cost of medical care for injuries sustained in accidents is a significant component of insurance claims. As healthcare costs rise, so does the pressure on insurance premiums.
Claim Frequency and Severity: An increase in the number of accidents (frequency) or the average cost of those accidents (severity) in a specific area will lead to higher rates for everyone in that region. Factors like distracted driving and more congested roads can contribute to this.
Weather Events: Tennessee is no stranger to severe weather, from tornadoes and hail to flash floods. An increase in catastrophic weather events can lead to a surge in claims, prompting insurers to adjust rates to cover these losses.
So, why would an insurer like State Farm decrease its rates? A rate reduction can be attributed to several positive trends. It could indicate that the company has experienced fewer claims than anticipated, or that the cost of those claims has been lower than projected.
It might also reflect a strategic business decision to attract more customers in a competitive market. Improved driver safety, potentially through the adoption of telematics programs that reward good driving habits, can also play a role.
Regardless of the specific reasons behind State Farm’s decision, this move presents a golden opportunity for consumers. It’s a reminder that car insurance rates are not set in stone and that proactive steps can lead to significant savings.
How to Save on Auto Insurance in Tennessee
Whether you’re a State Farm policyholder or insured with another carrier, this is the perfect time to be proactive about your car insurance costs. Here are some actionable steps you can take to take advantage of this rate adjustment and minimize your expenses:
1. Re-quote Your Policy Before the Rate Change
For current State Farm customers, it’s crucial to get a new quote before your policy renews, especially before the July 16, 2025 implementation date. While the overall rate is decreasing, individual premiums can still vary based on your personal details.
A new quote will ensure the latest rates and any new discounts you may qualify for are applied to your policy. Don’t assume the discount will be automatically applied in the most beneficial way. You may need to talk to an agent to confirm you’re getting the best possible price.
2. Shop Around and Compare with Other Carriers
This is a cornerstone of minimizing your car insurance costs. Never assume your current insurer is the most affordable option. With State Farm potentially lowering its rates, other companies may offer competitive pricing to retain their customers and attract new ones.
Get quotes from a variety of national and regional insurers, and ensure you are comparing apples to apples by selecting the same coverage levels and deductibles across all providers. Online comparison tools can make this process quick and easy.
3. Review and Adjust Your Coverage
Take a close look at your current policy. Do you have the right amount of coverage for your needs? While Tennessee’s minimum liability requirements are a starting point, they are often insufficient to cover the costs of a serious accident. However, there may be areas where you can make adjustments.
Collision and Comprehensive: If you drive an older car with a low market value, paying for collision and comprehensive coverage may not be cost-effective. A general rule of thumb is if the annual cost of these coverages exceeds 10% of your car’s value, you might consider dropping them.
Deductibles: Increasing your deductible (the amount you pay out-of-pocket before your insurance kicks in) on collision and comprehensive coverage can lower your premium. Just be sure you can comfortably afford the higher deductible if you need to file a claim.
4. Ask About Discounts
Insurers offer a wide array of discounts that can significantly reduce your premium. Many drivers qualify for discounts they aren’t even aware of. Be sure to inquire about:
Multi-policy discount: Bundling your auto insurance with your home or renters insurance.
Good student discount: For young drivers with good grades.
Safe driver discount: For having a clean driving record.
Defensive driving course discount: For completing an approved course.
Low-mileage discount: If you don’t drive your car very often.
Vehicle safety features discount: For having features like anti-lock brakes, airbags, and anti-theft devices.
Telematics programs: Many insurers, including State Farm with its Drive Safe & Save™ program, offer discounts based on your actual driving habits, monitored through a smartphone app or a device installed in your car.
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